Connected Data for Smarter Decisions: How Difficult Tradeoffs Impact Scope, Cost and Schedule

All right. Hello everyone. Welcome to this webinar, Connected Data for Smarter Decisions: How Difficult Trade-Offs Impact Scope, Cost, and Schedule. My name is Ahmed Fouda and I’ll be [inaudible 00:00:19] for today’s webinar. I would like to start off by addressing a couple of housekeeping rules as we intend to keep the flow of the presentation, questions will be held till the end of the presentation. You may also ask questions throughout the presentation by clicking the Q&A box at the bottom or top of your screen. You may also address or upvote your questions by clicking the thumbs up button. AACE International will be reaching out to attendees and present them with continued education units for today’s webinar. Without further delay, I would like to pass it over to the presenters from the NA team.

Jordan Brooks:

Thanks, Ahmed. Sorry about that. Got click [inaudible 00:01:15] there. So let me introduce myself and then my partner will do the same. So I’m Jordan Brooks, product manager at InEight. I’m product manager for Planning, Scheduling and Risk. Been in the construction industry for going on 15 years. This’ll be going on my third year at InEight specifically. Prior to InEight, I worked at one of North America’s largest contractors in more of a project controls consulting functionality. So I traveled to different projects across different industries and markets and learned a lot about their project controls, how they were operating, what they did. And that brought that experience over to InEight now on the planning, scheduling and risk side and hopefully building a product that people want to use. So let me pass it over to Rick now.

Rick Deans:

Well, hi everyone. My name’s Rick Deans. I’ve been with InEight for… I used to round up to 25 years, now I round down to 25 years for different reasons, but I’m looking at some of the locations as people are coming in. We’ve got Amsterdam, we’ve got Sudan, we’ve got Kingdom of Saudi Arabia. So super excited to have folks with us from all over the globe. And a big shout-out to our friends at AACE International for hosting this event. A little about myself. I spend a lot of time working with our customers, typically in the field in their offices, trying to understand how they can better take advantage of some of the tools that InEight provides. I lead up several industry focus groups that really take into consideration specific needs and business challenges that certain segments of our customer base face. And I really enjoy this stuff as well because again, shout out to AACE for having us on and letting us talk about some of our solutions and some of the value we bring to the industry.

Jordan Brooks:

Thank you, Rick. So let’s do a blurb about InEight here. For those who don’t know exactly who we are, both Rick and I said a lot of words about InEight, but you may not be aware of who we are in the industry. So InEight is a platform solution and what we focus on is scope, costs and schedule across programs or project life cycles. We want to make sure you deliver proven project certainty. How we do that, you can see on the screen there it’s four general buckets, one of those being managing project information, the other one being contracts and change. A big one obviously cost and schedule, that’s two of those. Scope, cost, schedule there. And then the last one down there, but not least is design and construction work.

So we want to provide a platform solution that touches on each one of those higher buckets in one way or another and hopefully delivers proven project certainty for our clients. That’s our main focus. So before we get to the agenda, we’re going to do a poll real quick, take a temperature check of who’s in the room and what your role is, what your company does. Just get an idea of who we’re talking to today.

Rick Deans:

And once you fill those out we’ll share those so that everyone could see, to Jordan’s point, who’s in the room and then how are we represented here.

Jordan Brooks:

Give you another two seconds and then we can share the results, I think. So I’ll pull it up what I see on my end. So it looks like actually pretty even split for this one with the contractor owners and engineers and down below the roles, looks like we got some cost engineers, a lot of schedulers in the room that’s talking my language there, estimators and then some business leadership management. So good. Looks like a good spread of a lot of different people in the room.

Rick Deans:

Let’s not forget our two architects.

Jordan Brooks:

Two architects, that’s right.

Rick Deans:

Shout out to our architects.

Jordan Brooks:

All right. So thanks again for everyone for joining. Let’s get down to the meat of the presentation here. What are we going to learn? So Rick and I are going to focus on a couple of things. It’s going to be really focused around data and technology, but what we want to really focus on is the benefits we see from improving technology within the industry today. Learn what impacts data has on project decisions. So what does this data and this technology bring to your project that you can use to make decisions on that project? And then learn about benefits that are seen from the greater collaboration that we’re seeing from this technology and how companies are using it across the industries.

And real quick, just a high level highlight, shy out to what InEight does and where a lot of this material for this presentation, this webinar came from. So InEight, this is the third year that we have done what we call our InEight Global Capital Projects Outlook. And what that is a writeup where we send it out to 300 large capital project enterprises throughout the globe. And it’s 26 questions, I believe, of a survey that we gather all this data back from those 300 participants, put it together and do a little writeup on what we’re seeing in the industry, kind of a temperature check for InEight. And we provide this throughout social media as well to our clients and prospective clients to look through and see what we’re seeing on our end from this survey. And one of the main highlights in that that I think got Rick and I excited was the continued optimism that we still see in the industry today.

That’s one of the bullet points obviously, but this slide is the top one that I wanted to touch on because that continued optimism I think is coming from the bullet points below it, which we’re going to touch on in this webinar with the technology benefits, the connected data, greater collaboration. Technology is one space that construction as a whole has lagged behind in number of years to a lot of other industries in our world. And I think that seeing the construction and engineering world catch up is where a lot of this continued optimism is stemming from. So it’s got us very excited about that. There is a link at the bottom that will actually take you to that annual global capital projects report that we do. I know after the meeting, after the webinar me, this PowerPoint will get shared and so you’ll be able to go to that link if you’re interested in reading about that a little bit more. Rick, anything I forgot to mention on that?

Rick Deans:

No, you did a great job and I couldn’t agree more. When I go out and talk with people, it just seems like there’s a great amount of optimism and people are really moving ahead on their projects and their initiatives. So it’s great to see the industry’s hard at work.

Jordan Brooks:

Awesome. Okay. So let’s get to technically the second bullet point, which is technology benefits and what we’re seeing in the industry today. So one of the big technology benefits that we’re seeing really across the industry in every market is platform solutions, similar to what InEight offers, but that seems to be the buzzword that we’re seeing across the industry. A lot of different software companies that are providing construction and engineering companies with a technology, their main focus and goal nowadays is trying to perform a platform solution. What that gives clients is we’ve seen it’s invaluable, but one of those things is connected data. You get things from that connected data where you can use that data to make decisions on a capital planning project. And that’s becoming more and more what our clients and prospective clients are asking for.

And Rick’s going to touch on here in a little bit where he’s seeing a lot of these connected solutions coming into play, what we’re going from the old world to the new world. But that’s one big technology benefit that we’re seeing is that is those platform solutions that are being introduced across the industry today.

And some of the look at those, Rick, I’ll let you touch on this a little bit.

Rick Deans:

Sure. I think one of the advantages of having project-level systems and the benefits of the technology is that for instance, that top screenshot is showing us a changes log within our application. And what that’s allowing us to do is behind the scenes, it’s doing some workflows, it’s doing some routing based on predefined thresholds for approvals, it tracks ball in court. So while all the key information is being captured about a potential change or we’ve identified an issue that might morph into a change, the system is really keeping track of for us what that issue might be, who’s going to be involved and what that routing is going to look like should that escalate into a change. So that’s one example of how the technology can really benefit because information is going into a system that’s reportable and routable. And then the second screenshot is really more of an audit log.

So it’s a more of a behind the scenes transaction history, if you will, of what’s changed. So if you’ve ever worked with a spreadsheet or maybe an access database, one of the things we hear a lot is, “We don’t know what happened. We were all working on this thing Thursday evening, we came in Friday morning and it’s changed, but we don’t know exactly what changed or who made the changes. User X felt that they made this change. User A, B, C made that change, but we can’t tie it all together.” Where the technology really does a great job of tracking all of those individual keystrokes. When was the change made? When was it made? By whom? What was the old value? What was the new value? And all this great information is along for the ride by implementing more of a platform-based system.

Jordan Brooks:

And again, we’re going to go to another slide that shows a different screenshot here, but all focusing around technology benefits and another of the big benefits along with the audit logs that Rick touched on the previous screen is having historical data. What you’re looking at here is a benchmarking screen within InEight estimate. But besides that, the one main technology benefit and having connected data is having as-built or historic data for your organization that you can use down the line to make decisions easier on you. Maybe you’re going to be more proven on that project certainty as far as how confident am I with the results that we’re estimating or forecasting or showing in our schedule and plan that we’re going to achieve on this project.

Hopefully for our clients using that historic data and the technology benefits that we’re seeing of a platform solution, you can use all of that information to at least start from a better foundation before the project ever starts. Pre-construction time going into execution, you want to be a little bit more confident on where you’re headed. And we’re seeing a lot of that within our clients day is that they’re getting more information that they can use to set themselves up early on in the project life cycle to make it a successful project. And what that means is obviously staying on budget, staying on time, and not having a massive increase in scope that you may have missed. And so that’s a huge benefit we’re seeing through the industry today.

Rick Deans:

And I would argue too, when I got into this industry a few decades ago, Jordan, this type of analysis would’ve been the result of a pretty intensive research project. People would have to go scour through old cost reports, wasn’t uncommon to see people going through three ring binders and as diligent individuals, the professionals, they wanted to validate new estimates and they wanted to have some basis of approval, but it was very cumbersome and tedious. And by having an interconnected system like this, this is really a byproduct of having done all of those things. If I do my job and I do it well in all of these different areas, this stuff just surfaces. So I’m in the context of perhaps putting a new capital projects estimate together. And to Jordan’s point, not only can I see how we’ve estimated this work in the past, but because we do have a full life cycle feedback loop, I can also see how we’ve performed this work in the past and I can selectively choose maybe based on project type or geographic area which projects I want to include in that analysis.

And again, I don’t have to stop what I’m doing and go do a research project to get this information, it’s coming to me as I’m using the tools. And I think that’s a pretty major distinction.

Jordan Brooks:

Yeah, absolutely. And I think another point that I want to make there, Rick covered it a little bit, but this one being cost related with the estimate today with platform solutions even specifically about InEight, one of the big improvements I’ve seen specifically is scheduled data. I know in the past scheduled data’s been something that a lot of companies don’t hold onto. They don’t have a sophisticated way of keeping it and mining it and adding in that schedule piece to the cost and the scope piece. I’ve seen huge improvements on planning or upfront cost loading schedules, making your schedules actually talk to the estimate. So you’re using your estimate quantities to actually get your durations and you can use those points of data to say, okay, where is this duration coming from? Oh, here it is right here in my estimate, which is huge with having a platform solution is you can relate all of those different applications to each other and see where things are coming from and it tells you a story, which that’s one of the main things I’ve seen in the industry today.

So that’s some of the technology benefits. One of the things that we touched on already a little bit multiple times throughout technology benefits is having data and having it connected. I think this is, again, I’m going to use one of Rick’s words here, but this is a byproduct of having some of those technology benefits being introduced to the industry today. You’re seeing a lot of clients asking for their data, can we store our data? Can we use our data? Can we mine it? And having that connected is a big thing. If you’re just looking at, let’s say only your estimate application and it’s data, but you’re not looking at your control system, your schedule system, possibly your risk system, it may not tell you the whole story that you need to see to make decisions. So having connected data is hugely important. Rick did a blog recently on ERPs and project management software, so I’m going to let him talk a little bit more about connected data and what he’s seeing.

Rick Deans:

Yeah, I appreciate that, Jordan. So a lot of times when we talk about connected data, people don’t know what does that really mean? And Jordan’s exactly right, most organizations have an ERP or small-scale operation might be an accounting system, and those are crucial to the day-to-day operations of a concern. But sometimes there’s a gap between the information they provide and what a project focused platform might be able to provide. And I’ll give you some examples. Number one, maybe the timeliness of the data. As we know, most accounting or ERP systems have a month end close cycle and there’s usually a period of four to six days, maybe seven days after the month actually closes during which all of the closeout processes happen. And so for instance, here we are, let’s say toward the end of July, it may be another few weeks, it might be that first or second week in August before we really get meaningful performance data on how we did in July.

And meanwhile we’re going to be in the first or second week of August when we get July’s results and so on and so forth. Another thing that we talk about sometimes is the level of granularity of the data where an ERP system likes to really have summary values and that’s important, but project systems typically get down into a little bit more detail in terms of quantities, productivity analysis, maybe we’re looking at a set of activities that roll up to a broad-based cost code. And then there’s something that I like to call the 80/20 rule. Everyone knows Pareto’s law, right? So in most capital projects there’s maybe 20% of the work that is going to carry 80% of the cost and the risk. So again, project systems allow you to weigh where you want to apply your focus. So again, if I know something doesn’t have a lot of risks associated with it, maybe it’s a pass through that, maybe I don’t want to really focus on skis. And then it’s important we’re talking about connectivity.

So certainly we want our project level system to be able to communicate to and share data with an ERP, but we’re also focused on how the project controls platform shares information within itself. So for instance, when we do daily field collection, hey, that information is automatically updating my earned value progress. We’re going to talk about that a little later. So I’m not reliant on a lot of mechanical things to happen with a variety of systems and integrations to get meaningful data. I can get meaningful data today. In fact, I can get meaningful data before someone even picks up the first tool on the shift because I can do some pre-planning and I can understand, “Okay, I think we’re going to achieve this result today in terms of quantities and in terms of people that are going to be working on this task.” And I can see ahead of time before we even start the shift whether or not we’re going to be successful relative to our budgets of costs and hours.

So again, it switches the plot a little bit instead of me being on the tail end of some big accounting system and waiting six or eight weeks to find out how I did it during a specific period of time. Really empowers me if I’m the person in the field because now I can proactively plan and I can see how that’s going to relate to my budget for hours and costs, et cetera. So it’s really important that all this data knows how to marry up with itself and present meaningful analysis and graphs and tables, et cetera.

Jordan Brooks:

Yeah. And along those lines, more into the project controls or project management software side of things, somewhere else we’re seeing huge improvements with connected data and technology in the industry is with cost schedule integration. Two big ones of the scope, cost, schedule that we are going to keep bringing up over and over again because a highlight of InEight and what we try and focus on. But what we’ve seen with our tools and our platform solution is how are clients using this to achieve the cost/schedule integration? Rick is used to seeing this quite a bit. I’m going to let him talk through this, this and then I’ll take you through another area that I see it as well.

Rick Deans:

Yeah, and this is one example of how a schedule and a budget might be related. So here in the schedule we’ve got our execution plan. You can see we’ve got various stages, procurement, construction. Within each of these stages, in this case we’ve assigned very distinct and unique codes. So we’re in stage five construction. You can see my examples. They’re civil, electrical, general requirements, mechanical, et cetera. And these all relate back to the control budget. So these codes, if you will, are also found over in our control budget. So as we’re progressing actual work that’s occurring in the field, we’re really doing a couple of things. We’re updating our schedule and we’re updating our control budget and that’s allowing us to do things like earned value analysis, et cetera. So these same codes that we see over here on the left side of the screen, there are over here on the right side of the screen.

And we can marry these two things together. And it is typical that we we’re going to carry different levels of detail in both systems. Maybe a single line item in the control budget might be represented by many, many line items in the schedule. Likewise, I might have gone to great level of detail to define something in my control budget that really manifests itself as a single or maybe a couple of line items in the schedule. But by having a consistent coding structure that people are familiar with and can communicate, it really does tie these things together and you’re not working in independent silos and trying to compare apples and oranges. These things can be really joined together initially at the hip and stayed joined together through an intelligent coding structure.

Jordan Brooks:

Yeah. And I think that the concept of having a cost schedule and integration, the way we’re showing on the screen isn’t a brand new groundbreaking thing. In my past I’ve done it, but it involves spreadsheets, multiple spreadsheets, couple formulas in there, constantly updating it to make sure that that schedule and that cost budget matched. So there’s a lot less maintenance being shown in the industry when you come into a connected platform. That’s one of the big benefits is that a lot of time and effort isn’t being wasted on connecting these, and analyzing them and making decisions on what that information is telling you, which that’s getting us into our next one here of what are some of the data impacts that we see on project decisions today. So I’m going to go to one screen over here. So one of the big ones that we see and it ties this data impact project decisions perfectly, is a centralized risk register.

So not only cost schedule integration in here, but things like scope is covered in risks, obviously, possible cost creep, possible schedule creep. That’s all covered in your risk register. And having a centralized risk register we’ve seen is a huge benefit to our clients. Being able to look at those risks, see what they’re going to impact not only on the schedule side but also on the cost side in the same application is something that is hugely beneficial for a lot of our clients. This is something that is becoming more and more prevalent. Having one application that covers both the cost and schedule side when you bring in that cost schedule and integration and also possible scope creep. All of that’s covered in here. You could see where your cost may be traded off with your durations. If you’re trying to save on durations, but you’re spending cost to do so, you can see that. You can track your mitigation efforts in this centralized risk register all in one area.

So this way your cost engineer isn’t seeing information that possibly your scheduler isn’t, and vice versa. Your scheduler’s information is shown in here as well that your cost engineer can look at and make decisions on his end. So the whole project team has a view of this can make decisions on this jointly. Again, this leads us into that greater collaboration towards the end, but this promotes that greater collaboration when you have a centralized area for not just your risk register again, but all your data. Hugely beneficial for projects is what we’ve seen.

Some other advantages are the dashboards. All companies have their form of dashboards. I’ve seen customized dashboards, which I know a lot of companies love to do, but one way to make these dashboards is being able to have your connected data. So with that connected data, you can not only bring in, let’s say not just actuals, but you can also see early remaining late possibly your forecast can be overlaid on these. All that stuff is achieved through having connected data and being able to pull those together and not live in, let’s say, an estimate data or a scheduled data or a control budget, data silo. And you’re only seeing one side of the story. A lot of the things I’ve seen since being in the industry is that when you talk about SPI, there’s a lot of contention on where SPI comes from.

Are you looking at it as “S” is for quantity? Are you looking at it for cost or are you looking at it for schedule man-hours in that schedule scenario? And really, why not look at it in all three? And having connected data, you can compare what’s my man-hour SPI compared to by cost SPI. And compare those and say, are we telling the same story between my control budget and my schedule? That’s something that I’ve seen be disconnected across the industry for a long time. That’s going away now with these platform solutions and having that connected data in one spot, which this ties us perfectly into earned value. So for those of you who are on here for your CEUs, Rick’s going to get into some of what earned value is right now.

Rick Deans:

Yeah. So as we go through this, I like to think of earned value as answering the question, what should I have spent in terms of costs and hours to complete this amount of work? And there’s the few different things we can do to ensure we’re getting good data. So for instance, we’ve got some best practices. So yeah, again, we typically earn values for costs, duration, man-hours, equipment, hours. And what we’re really looking at is how much did I actually spend to achieve this result and what should I have spent to achieve this result? And we have different indices that we can rely on. So for instance, you might’ve heard of CPI. Cost Performance Index. In our world, we always relate earned over burned. So if you’re familiar with the Project Management Institute, PMI, that’s their mantra earned over burned. And what this does is it allows us to compare what we should have spent with what we actually spent.

And if we get a value greater than one, that means we’re doing well. If we see values less than one, that tells us there are opportunities for improvement, we’re not doing as well as we had planned. So we do have the CPI. We’ve also got a productivity index, which is really the same concept, it’s man-hours earned divided by the amount that you’re burning. So again, ratios of one or greater. One means you’re performing right at plan. If it’s greater than one, you’re doing better than plan. If it’s less than one, you’re not doing as well as you had planned. So what are some of the calculations or some of the best practices rather that maybe we can rely on? So a few things that we really try to encourage our customers to do is to develop a detailed work breakdown structure. So if you know there are going to be differences in productivity and differences in cost based on for instance, a cruise learning curve, soil conditions, different phases of work that are going to require different levels of access, we want to account for that in a work breakdown structure.

We also want to try to quantify as much as we can and really use quantities and units of measure. So in the example I’ve got, okay, if we were able to put in 285 linear feet of pipe, that’s a lot more quantifiable and it’s a lot more objective frankly than saying, “I’m about 30% complete.” And then by entering in the actual physical amount of work that we’ve done, the system is going to give us that percent complete. It might be 26.4%, it might be 32.1%. But again, if we can normalize things down to standard quantities, it’s really going to help us do a lot more of an objective measurement that’s really going to help us make good decisions. And then we want to make sure that earned percent complete and actual values are aligned. So for instance, I want to minimize the time between entering quantities and entering costs.

Our tools do have the ability of freezing things. So if I know that hey, we’re still getting payroll information in this week, I don’t want quantities to show up until payroll information is complete, then I can set it up that way. But we don’t want to enter a whole bunch of information around costs and not keep the progress updated or vice versa because we are going to get skewed information. So those were a few of the best practices that we see that we recommend our customers employ to really get true, meaningful objective earned value. Part of earned value is understanding what have we spent, but part of it is also looking ahead to see what do we think we’re going to spend to finish this? So here’s the continuing education credits part of the presentation. So if we want to use the terms EAC for estimate at complete, AV for actual value and ETC for estimate to complete, we can say, when it all is said and done, my estimate for completion of this work is going to equal the sum of two things.

What have I already spent, plus an estimate to complete the remaining work. So let’s take that estimate to complete the remaining work, what is that coming from? Well really, again, we’ve quantified the work. So we have a remaining quantity, we know the units that we haven’t yet done and we need to assign some sort of a unit value, either a unit cost or man-hour per unit value to that remaining work. And what we allow is different ways to come up with that unit value. So for instance, early on in a project maybe between zero and 10 or 15% complete on a physical percent complete basis. I want to revert back to my plan. I know we’re going to get off to a shaky start. Maybe all the materials aren’t going to be there, the equipment isn’t available, the crew is still getting to know each other, that’s okay.

After the second or third day of work, we can certainly expect some of those things to hinder us, but we don’t want that to affect our forecast. So maybe early on in the project stage, we want to use our plan to help us forecast or gauge the remaining cost of work. But then after a while we’ve got some momentum in the crews really finding its groove if you will. Maybe we’re 25% of the way along, maybe we want to do a look back and use some of our performance data that we’ve been capturing. And we can do that. What is our average performance since the beginning of the work? What has been our average performance over the last rolling 10 days? We can do things like that much more intelligently predict the remaining work based on the way we’ve been performing it.

So I can forecast based on my plan, I can forecast based on my performance, but what if I have new information? So what does that mean? Well that means that maybe we’ve hit a different type of condition in the soil or in the rock that we haven’t yet experienced. So maybe I need to come in there and manually put something in. Maybe I need to do a detailed estimate to complete. So using the same tools and buildup that I used to create my initial estimate, maybe I can model the resources that I’ve got available and model the productivity based on this new information. So maybe this new forecast isn’t coming from the plan or from my actual performance. It’s coming from new information. And then again, we do some of the chat about storing performance information. We do that. We’re able to report how you did during each period and you can use specific periods to forecast your work.

And then we can also pull data because it is an interconnected system. Maybe if we’re not performing this work, but we’ve made a contractual commitment either to a contractor or a subcontractor or a third party to fulfill this obligation, then we can use that information. It can flow right over from our contract module and we can use that as a means of forecasting the work that we’ve yet to perform. So it can be pretty powerful. We also allow for customers to create their own forecasts, individual forecast, and that allows for project team members to come together and collaborate and agree upon a path forward. And then we can create what we call a live forecast that is going to allow us to share that information organizationally.

So we can all come into that meeting with our own opinions and our own thoughts when we’re not really affecting any live data, we can collaborate through that, we can share that with each other and then we can collectively decide best case, worst case, most likely case. “Let’s go with this most likely case.” And we can make that now our forecast. So it really allows folks to have that visibility, forward-looking visibility that again, an ERP sometimes isn’t going to be able to provide because the ERP is so focused on actual transactions that have happened in the past to be able to show you what you did. But it’s sometimes a little bit more challenging to do, lookaheads and things like that in an ERP or an accounting system that is so reliant on transactional data that’s already occurred in the past.

Jordan Brooks:

Yeah. And to tie out on Rick’s forecasting slide here, being an ex-scheduler, I’m a little biased towards what I give as examples, but I would say one of the biggest things that was always missing when I was in the industry as a scheduler was having that forecasted estimate to complete value that we should be marching towards and having that represented in the schedule. So having those updated quantities that may have changed, or at least knowing what those updated quantities are so I could adjust the durations. And then also capturing that past performance accurately. Those are two big things that having connected data solves for you as a scheduler. And that gets me excited about having platform solutions in the industry. And where I think a lot of that continued optimism is coming from is there’s two big things, at least in the scheduling world that I was used to that are looking like they’re being solved in the industry today and we’re making an advancements towards those.

So great slide. Rick touched on those, but I didn’t want to call that out as a past scheduler because biased towards those two points. And then furthering on what you get from having connected data, let me pop these up here again, and let me go back, I got click happy again. So like we talked about having connected data and being able to not be siloed into either your schedule system or your estimate system or your quantity system, whatever it is you’re using, you can use a multitude of different solutions and applications and endpoints to say, “Okay, let’s bring this connected data together.” And look at these in a report or a dashboard that your company can use. Maybe there’s standard reports out there that we see quite often throughout your industry that can be just updated on a weekly or monthly basis, whatever it is with that data as it changes.

So as your quantities updates, you’re getting the new information that’s being shown here, your percent completes are going to adjust based on that, on your estimates to complete or your forecast, whatever that may be. And you combine those into a dashboard and these dashboards give you the tools and the ammo to actually make project decisions on your project. So do I need to ramp up? Should I be looking at ramping down? Do I need to spend money to decrease durations because my end date’s blowing out? Can I let a little duration slip because I’m building float on the back end and then maybe I can decrease the costs on the front end to save some money on my budget?

All of this information getting brought together in dashboards is a big thing that we’re starting to see and that our clients ask for quite a bit. And all of that can be brought up to the portfolio level. This is a big thing. So for a company that that’s very large has multiple projects across multiple sectors, how do you bring those up into a program or a portfolio level, look at them a high level and then get quality information that you can use to make decisions off of.

And so on here, this is just one example that we’ve seen where you can look at you got your current budgeted cost, your current estimate cost, the forecast cost that we talked about, what’s my gain loss on that forecast at not only a portfolio level but maybe down to a project level if that’s what you need to see it at. So this is powerful in that it lets you dig down into the level of details or raise up into the level of details that you need to make decisions off of. That’s a big thing that we’re seeing across the industry today.

And then with that, technology benefits as a byproduct. And then one of the things we touched on earlier about having a centralized risk register, another byproduct of both of those is we’re seeing greater collaboration. And I’m not talking just greater collaboration across owners and contractors, but this is stakeholder wide that we’re seeing this greater collaboration on. So let me get here to the next slide there. So one example of this is within scheduling, having a connected platform, you’re allowed to go or it allows you to go out to not only internal organization, specific resources to get feedback on your schedule, you can actually go outside your organization and get meaningful feedback from them that’ll help your upfront baseline plan or even your execution plan if you’re into it. You can update that actively with feedback from all stakeholders. So owners, contractors, design engineers, possibly vendors, subcontractors is a big one.

All of them can be brought together in one area cloud solution that we’re seeing with these platform solutions and give feedback that’s useful and meaningful. And where the industry’s going with EPC contracts being a big thing and design build contracts being a big thing, this greater collaboration as a team is becoming more and more important. And I think where we’re seeing the continued optimism come from is that this technology that’s being introduced to the industry is allowing greater collaboration. Like I said, it’s almost like a byproduct. So you just do your normal job and that greater collaboration is coming with it. So that’s a huge thing we’re seeing across the industry today.

Rick Deans:

No, I would add to that, Jordan, one of the things that I’m hearing from folks too is rather than this data being kept in the purview of some elite diehards that for good reason don’t want people messing with their system, the collaboration and the ability to send out markup notifications and get people contributing in that online web environment without touching the actual data is really helpful. It wasn’t that long ago, I was at a major refiner’s office and they were printing out 30 copies of a 100-page schedule, putting this all together and handing it out to people as they walked into the meeting and people were making their markups literally on paper. And as they walked out of the room, they stacked it on the scheduler’s desk and soon enough that scheduler, his week was set for him, he was going to go back and take all of that input, analyze it, and adjust the schedule based on all of that input where all of this is just happening in a very real time collaborative electronic environment.

Jordan Brooks:

Absolutely. And so I think one of the biggest things with greater collaboration, also a benefit that we’re seeing is the ability to not only recognize risks upfront but also mitigate those risks and go into the next slide here ties into this. So I touched on it a little bit earlier, but with an in-app or a platform solution that allows you not only to have a centralized risk register, possibly a schedule simulation that shows you schedule delays and then you can combine that with a cost simulation that shows cost increases or decreases from that risk register. Or I guess one way you see a lot of greater collaboration being introduced through platform solutions again, is that cost engineer can come in, run a simulation based off of the same register that your scheduler is looking at and running his simulations off of.

So those risks are tied together. You use those risks to maybe you want to decrease your duration, so you’re willing to spend a little bit more money that’s shown in that risk register. And then when those risks are tied into either the schedule simulation or the cost simulation, you can see where those trade-offs are happening, weigh which ones you should mitigate, which ones you shouldn’t mitigate, which ones can your job team live with possibly that aren’t impacting as high a level as other ones. And then that greater collaboration allows you to mitigate much more effectively on a project team or even at a program level. That’s where we’re seeing a lot of this benefit coming from for these platform solutions. And then additionally, to get down to a lower level, I’m going to let Rick talk about the field data collection and what we’re seeing with greater collaboration from that.

Rick Deans:

Yeah. A lot of times when we collect data from the field, the screen we’ve got right here is a time sheet. I can see the tasks that we worked on. I can see the people and the equipment that were used on those tasks and the hours that they worked, but it’s just a microcosm of what we’re really doing. Because if you’ll notice those tabs across the top, this is the time sheet piece of that, but there might be other information that we’re capturing from the field. For instance, what did we actually get installed? What quantities did we achieve? Were there any issues that arrived that arose in the field? Do we want to make notes of those? What about our productivity? We’ve got quantities, we’ve got hours, we’ve got people. And now what we can do is we can see what that productivity might look like and the ability to capture digital signatures so that people can sign in out in the field.

And so again, that information is being captured at the source in the field and then through automation it can be passed along to all of those other business processes downstream. So based on the quantities that we completed today and the hours that we recorded, I can then update my earned value, I can update my forecasts. So again, it’s having that data coming in from one source and then being immediately available to all sorts of other business processes is really where we see the value. No one has to touch that data more than once to get meaningful results out of it.

Jordan Brooks:

Yeah. And tying this back into something Rick touched on earlier with quantity forecasting and also capturing earned data. Obviously it might be a little bit high level of what we touched on today, but you can see how we walk through our webinar today. Quantities coming from this screen here, being fed back to your control budget, which is tied to your schedule, which all feeds into a generalized or centralized dashboard. You can hopefully grasp where all that connected data is ending up and how it could benefit you with those project decisions. If you’re getting real time data from the field, you can make project decisions early on if say you see one of your operations slipping for whatever reason, maybe it’s a critical operation that you need to make a decision on immediately, you can with that real-time data being pushed into a centralized location, looking at those dashboards, looking at all sides of it, not only quantities, but then tying in the cost and then the man-hours to that system. That’s where those benefits that we’re seeing come from.

So with that, we touched on early on, it was obviously continued optimism, but the second one we touched on was identifying the benefits we see from improving technology. We went through what impacts data has on project decisions, and then lastly we touched on where we’re seeing some of that greater collaboration come into play with that technology benefits today.

So real quick, there is a survey that we’d like you to take, there’s a QR code here. Let us know how we did, love to hear some of your feedback. I’d like to thank AACE for putting this on before we get to the Q&A side of things here. And I appreciate everyone else participating in this. It’s been a good one. Rick, thank you again also. And Ahmed, thank you. With that we can get to any Q&A questions that may be out there. I think we have time for a couple, if there are any good ones that people were voting on.

Ahmed Fouda:

That’s great presentation. I have the first question here, based on practicality and common sense, what should be the most effective sequence? Estimate the scope, then schedule or schedule the scope then estimate?

Rick Deans:

Yeah, that’s a great question and I see in the chat it looks like some of our participants have responded to that. And it’s always tough, right? Because let’s say we had an even mix between contractors, owners and engineers, let’s take each one of those for instance. If I’m a contractor, maybe I don’t have all of the scope that I need to do a detailed bottom up estimate, but I have some high-level information. So it might make sense to start putting a schedule together based on what I know about that. And then as those details become available, it might make more sense to build out the estimate. If I’m an owner, maybe what I have is I’ve got some historic costs and if I’m planning to do a turnaround or a maintenance on a facility or build a new facility, maybe initially what’s really important to me is a high level budget, right?

Because I’ve got to go through my internal steps to get some a approval and funding for this. So maybe it makes sense to start with an estimate, leaving enough room in there knowing that things might change. And then again, as someone pointed out in the chat here, hey, maybe you start with the schedule because you can’t really understand what the costs are until you understand the duration and that might affect things, have some trip wires, things like escalation. Maybe we’re going to go into another year where materials prices are going to increase. So the answer is depending on the circumstances, there’s really a few different ways to do this.

And the good news is when those things are tied together and you’ve mapped some of the schedule information to some of the budget or estimate information, it can be iterative. And that’s another comment that I saw. You could have time to iterate and maybe I start with a high level schedule, fill in the details of the estimate and have that bleed over to the schedule as I’m creating key milestones and dependencies in the schedule that can feed back to my estimate.

So Jordan, from your perspective, have you seen a hard and fast golden rule in terms of do we start with the schedule? Do we start with the estimate? Or sometimes do the circumstances dictate the best place to begin?

Jordan Brooks:

No, and this is a really good question actually, and I’m going to throw a plugin for AACE on this. So I think what I’ve seen, at least from my experience, what I’ve experienced from building schedules is I’ve done both. And what I’ve seen is it depends on what part of the life cycle of the project are you in on. So I’ve done a conceptual schedule where you had very little information, maybe a couple GNA drawings that you’re using to put together some type of schedule. There’s going to be no estimate at that time. So you’re putting together a best guess schedule. And AACE does a really good job of having a recommended practices on different classes of not only estimates but schedules, which they did a couple of years ago, and you could go in there and find for a conceptual project, what type of schedule should I have, how much level of detail should I have?

And really what it comes down to is not just level of detail, but what’s your certainty on that? So when I was building a conceptual schedule, we went down and actually resource loaded this conceptual schedule that all we had was GNAs on it. But you have to make upfront assumptions that this is going to be possibly a growth of 200% on the scope side or it could be a decrease of 200% because you just don’t know. The owner’s just asking to get an idea of what that schedule could look like. What does your company possibly provide as benefits that could shorten the duration compared to other ones? So you don’t have the estimates to go off of.

But obviously once you start getting down to the estimate and then the baselining phase of a project life cycle and having to produce a baseline schedule, at that point you would expect that the rule would be that your durations in your schedule somewhat relate back to the quantities and the unit rates you’re seeing from your estimate. Obviously that’s something that we strive for in the industry still today to try and achieve is that those schedules relate back to that estimate. They’re coming from somewhere. Where do those durations comes? You’re hoping that scheduler isn’t saying those durations just came from a swag, I just punched them in there. It’s just a best guess. Hopefully that’s not always where they’re coming from. Hopefully there’s some backing to that. So I think it really depends, and that’s a great question that I see quite often actually.

And then, sorry, not to interrupt, but the further tie that in, I see down further some are asking about or they’re bringing up indirects. And I think one of the big things with having a schedule that is tied to your estimate quantities and the unit rates is that when you go into the risk simulation side of that project, you can use your risks, you can plug those into your risk simulations, you can see how those durations increase or decrease and then your time dependent costs can get applied to those increase or decrease durations. Or if you’re sophisticated as an organization, maybe you’re plugging in and your time dependent costs directly into your schedule. And then as that duration increase in the risk simulation, you can see it on screen happen and you can make decisions on do we need to possibly mitigate that risk that’s causing that increase in indirects. We’re starting to see that more and more. That’s huge with these platform solutions and the connected data that we’re seeing. Ahmed, I think you’re on mute, Ahmed.

Ahmed Fouda:

Oh, I’m sorry.

Jordan Brooks:

All good.

Ahmed Fouda:

One second. So the next question from Chelsea, how is management reserve managed and tracked to tie it to your risks?

Rick Deans:

You want to take a shot at that one, Jordan? I’ve got some anecdotal observations on that.

Jordan Brooks:

Go ahead, Rick.

Rick Deans:

So clearly we want to set aside some a management reserve or some a contingency fund and we want to be able to tie that to our risks, just like the question says, how do we do that? And it’s just like any other effort we would go through. We want to set some funds aside for that. And what I’ve seen a lot of organizations do is time phase when they think those management reserves are going to need to come into play. And a good trip wire or reporting mechanism might be, “Hey, we’re dipping into our management reserves way too early, a lot earlier than we thought we would.” That could happen on a capital project and that might be cause for alarm. So the sooner that information is surfaced to us, we can take corrective action. I’ve also seen on short duration maintenance plant turnarounds, for instance, maybe we’re going to spend a hundred million dollars within 30 days and we’re expecting during the discovery phase of that event, which is going to happen between days six and 14, the majority of our management reserve is going to be consumed during that period of time.

So again, we can track the actual spend on a time-phase basis relative to the actual spend. So the plan versus actual, and we can do a lot of stuff with that information. We can analyze that; we can make decisions based on that information early on in the project life cycle while we’re still executing. And then if we get to a certain point, if we get to day 16 and we’ve only touched 75% of our contingency reserve, maybe that’s a good time to take a look at that and make sure that we’ve accounted for that properly. Jordan, I know this is your livelihood, so I’ll let you chime in on this one too because I know you’ve probably got some good opinions on this.

Jordan Brooks:

No, yeah, and you covered it really well, Rick. I mean I touched on it actually a little bit in the previous question that I was answering, but yeah, that management reserve that we see, a lot of times there’s companies handle that in multiple ways that I’ve seen, at least with our tool is they either plug that straight into the schedule for their risk simulations, they’re running it, and then they can say, “Okay, it’s increasing our management costs by this much, or it’s decreasing it by this much,” and then they’ll adjust that estimate or that number in the estimate.

The other way that I see it is they possibly could get a daily management cost that they’re using on a job. So all of our management together costs this much, let’s run a risk simulation and increase by X number of days. Okay, let’s do the dollar per day that our management has, increase or decrease that number, whether that be in contingency or wherever that may be within that estimate. You increase it or decrease it to cover that increased cost from the risk simulations that you’re possibly seeing done. And that’s where I’ve seen it done nowadays with our tools that are out there right now.

Ahmed Fouda:

All right. So the next question from John Glass, I didn’t hear much on the use of trending either cost or productivity and determining an estimate to complete. How do you include this?

Rick Deans:

We’ve got all these questions we might engage offline on this one because I’ve seen trending used a variety of ways. So for instance, a trend might be material price escalation, unavailability of local subcontractors. We’re going into a geographic area with relatively unskilled labor and that’s going to be a trend that affects our productivity. So as we’re doing that forecasting and we’re understanding what that estimate to complete is, we can certainly apply those trends. So if I know that my material prices are going to rise because we’ve hit a shortage of supply and the prices are going to go up, I can either label that as my trend and then I can look through the use of our dashboards and reporting, see what percentage of our ETC is determined by changes to material costs or escalations or in availability of supply chain. We can surface all of that stuff. And it’s just a matter of including that trend descriptor with that forecast. Now, if I misunderstood the question maybe that that’d be due to time constraints. We might want to handle that one offline.

Jordan Brooks:

Yeah. And real quick, we’ll make this the last one and then we can handle the last ones we didn’t get to offline. But I just to add to Rick’s point there trending and where that can tie into estimate to complete with cost or productivity. By having that connected data that you’re getting from that platform solution, I won’t even tie this to just a short term. Maybe you can look at historical data about how you’ve done on an operation, whether that’s with cost or productivity. And you can maybe account for that in your estimate to complete with the historic data you’ve seen on similar projects with similar operations. So not only by storing that information in a platform solution, having that connected data, you can look back as far as you possibly have access to or as near term as you want to.

Maybe that operation has been happening on the job already. You’re storing that performance on there. You can go look and say, “Well, we’re running at a unit rate of this on this operation. Let’s apply that to our forecast to get maybe a little bit more accurate estimate to complete.” So you’ve got a lot of data you can look at. We can recommend all kinds of things. I’m sure Rick and I have all kinds of ideas of what you could do with that. But having that data I think is the important part of that. And like John said it, you have trending, whether that be historic trending or even just project trending, you can go to any level you want.

Ahmed Fouda:

All right. So next question. How can you resource-load a conceptual schedule when the resources are not known and it is based on high-level [inaudible 00:59:30]?

Jordan Brooks:

Yeah, and I’m looking at these, Ahmed. I think we got three left that maybe we’re already three minutes over. We’ll cover these offline if that’s okay with anyone else that has a question. Go on and throw it on before you leave and we’ll answer these offline for any attendees that we didn’t get to because I’ve got answers to most of these, and I’m sure Rick does as well.

Rick Deans:

Good use for your inference engine there.

Jordan Brooks:

Yeah, absolutely. So we’ll cover the ones we didn’t get to since we’re already three minutes over, we don’t want to take up too much people’s time. Let me go to one more screen over here. All right. So thanks again from Rick and I, AACE. Thank you for letting us participate in this webinar. As always, thank you for everyone who hopped on and participated. Always great participation. Ahmed, thanks for being the host for this webinar. We really appreciate it.

Ahmed Fouda:

Yeah, thank you everybody for attending this great meeting. And thank you, Jordan and Rick. AACE International will be in touch with you for the post-event recording. I hope you have a good rest of your day. Thank you so much.